Mid-Day Gold & Silver Market Report – 5/26/2011
CROSSCURRENTS IN THE MARKET CREATE UNCERTAINTY FOR THE FUTURE – Aid from China might not be enough to keep Greece from economic meltdown. It appears unlikely that Greece will be able to meet its goal for trimming its budget deficit in 2011, and as a consequence, the IMF may not provide funds for the next round of aid packages. If Greece is allowed to default this may set a precedent for any other eurozone economy in distress. No one really knows what the result of a Greek default would be. At a minimum the results will be “problematic” due the impact it would have on investors outside of Greece.
Meanwhile, slowed GDP growth in the US may give the Federal Reserve a reason to keep interest rates low for the foreseeable future. An interest rate below the inflation rate causes higher inflation, as it amounts to little more than the printing of money. The current rate of inflation, at least as the Fed looks at, remains within acceptable levels. However, the numbers the Fed looks at exclude food and fuel prices, which are causing many American households to feel the pinch of the Fed’s easy-money policies. When was the last time anyone in America went without food or fuel for an extended time?
At 1PM (CT) the APMEX precious metal prices were:
- Gold price - $1,522.20 (down $5.70)
- Silver price - $37.32 (down 42 cents)
- Platinum price - $1,778.80 (down $2.00)
- Palladium price - $758.60 (up $7.30)